Removing Barriers Blog

House Financial Services to Hold Another Removing Barriers Hearing

Posted October 18, 2015 by CUNA Advocacy

On Wednesday, the House Financial Services Committee
Subcommittee on Financial Institutions and Consumer Credit will hold a legislative
hearing on several bills aimed at removing barriers for credit unions and small
banks to serve their members and customers.
This is at least the tenth hearing the committee has held on these types
of bills since the beginning of the year; and, so far this year, 17 CUNA
supported bills have been approved by the committee. There more will be subject to a
hearing, ripening them for future committee consideration: H.R. 2473, the Preserving Capital Access and
Mortgage Liquidity Act; H.R. 2287, the National Credit Union Administration Budget
Transparency Act; H.R. 2896, the Taking Account of Institutions with Low Operational
Risk (TAILOR) Act.

H.R. 2473 would provide credit unions under $1 billion in
assets parity with similarly sized banks with respect to membership eligibility
requirements for the Federal Home Loan Banks (FHLB) System. Under the Federal Home Loan Bank Act, credit
unions do not qualify under the definition of “community financial
institutions,” and as a result they are not exempt from an eligibility
requirement requiring FHLB bank members to hold 10% of their assets in
mortgages at the time of joining the bank.
This exemption has taken on enhanced importance given the Federal
Housing Finance Administration’s proposal require bank members to meet
eligibility requirement throughout their membership in the bank, not just when
they join. The bill is sponsored by
Representatives Randy Neugebauer (R-TX) and Lacy Clay (D-MO), the chairman and
ranking member of the subcommittee.

H.R. 2287, the National Credit Union Administration Budget
Transparency Act, introduced by Representatives Mick Mulvaney (R-SC) and
Kyrsten Sinema (D-AZ), would bring transparency and accountability to the
National Credit Union Administration (NCUA) budgeting process by requiring the
agency to hold a public hearing and allow for an open comment period where
stakeholders can submit comments. The
agency held this type of hearing from 2001-2008, but the hearings were
discontinued. Some of criticized the
hearings as ineffective or theatre, but we believe they were and would be
critically important because they provide stakeholders with the opportunity engage
NCUA board members on the record regarding the agency’s budget – a budget that
is funded through credit union resources.

H.R. 2896, Taking Account of Institutions with Low
Operation Risk (TAILOR) Act of 2015, introduced by Representative Scott Tipton
(R-CO), would require financial regulators to take into account the risk profile
of the institutions that they regulate when promulgating regulations. CUNA
believes credit unions are precisely the type of institutions for which this
legislation is designed to help because they are well-capitalized, with a low
risk profile and a long history of meeting their members’ credit needs– in good
times and bad.

These bills, combined with the other 17 bills the committee
has approved this year, cut to the heart of the problem that credit unions face
in the aftermath of the financial crisis with respect to regulatory burden. Policymakers from across the political
spectrum acknowledge that credit unions and small banks were not responsible
for the financial crisis, but the public policy response to the crisis without
question fails to recognize this seemingly indisputable fact. Credit unions have been subjected to tens of
thousands of pages of new regulations in the last seven years; just last
Thursday, the NCUA and the CFPB finalized more than 1,000 pages of new
regulations for credit unions. This
hearing is part of the long process of bringing that to a stop.

Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.